Technology Why nearly 70 per cent of millennials regret buying their homes

22:36  19 july  2018
22:36  19 july  2018 Source:   cnbc.com

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Millennials aren’t exactly jumping for joy after purchasing their homes . Yet it turns out that 68 percent of them are feeling buyer’s remorse — almost double the amount of Baby Boomers who say they have regrets .

While young people around the world are struggling to get on the property ladder, an HSBC study found that 70 % of Chinese millennials have achieved the milestone. How do Chinese millennials buy their homes ?

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Millennials aren’t exactly jumping for joy after purchasing their homes.

About four in 10 millennials are already homeowners, according to a new survey of over 600 millennials (age 21-34) by Bank of the West. Yet it turns out that 68 percent of them are feeling buyer’s remorse — almost double the amount of Baby Boomers who say they have regrets.

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A different survey from Rent.com said nearly 80% of young renters don’t plan to buy a home anytime soon. So, millennials want to buy a home at some point, just not anytime soon. There is plenty of speculation as to why , ranging from their jaded attitude toward the housing market after witnessing

There’s one group of millennials that seems to have no problems buying homes . Seventy percent of young adults in China are homeowners, according to a recent HSBC survey. Mexico, with 46% of millennials owning their own homes , was the next highest country.

“Millennials are so eager to become homeowners that some may be inadvertently cutting off their nose to spite their face,” says Ryan Bailey, head of Bank of the West’s retail banking.

Here are the biggest areas of remorse.

Overspending on the down payment

Roughly four in 10 millennials felt they made poor financial choices when it came to purchasing their home. Part of the problem seems to revolve around the down payment. The survey found one in three millennials dipped into their retirement accounts to pay for their homes — a trend Bailey calls “alarming.”

“Borrowing from your retirement may make sense in special circumstances, but it’s definitely not a recommendation,” Bailey tells CNBC Make It.

To keep from getting squeezed, think about what you can afford as a monthly payment, and don't forget to include taxes and insurance in your calculations, Danielle Hale, chief economist for Realtor.com, tells CNBC Make It.

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We need to find out why 70 % of millennials are unhappy with their jobs — both in the UK and the US — and how we can change that. A Gallup study finds that 70 percent of U.S. millennials are disengaged at work. Home Improvement. Organizing.

57 percent say they considered buying a home when they looked for their last rental. "Homeownership among boomers, at 78 percent , is nearly twice as high as millennials , at 41 percent ," the study says.

Use filters on home search sites and price alerts to make sure you're not shopping for a home above your budget. "Don't fall in love with something that's already out of your price range," Hale says.

Underestimating ongoing costs

When you buy a home, the expenses don't stop once you move in.

Millennials understand basic costs, such heating and electric bills, but Bailey recommends also considering how much time and money it could take to mow the lawn, clean the house or deal with leaky faucet.

“When you’re a homeowner, you can’t call your landlord to fix things, so you want to make sure you have a little extra cash in the bank,” Hale says.

It's a big transition going from renter to homeowner, so make sure to take some time to learn about the maintenance costs associated with potential homes.

Settling for something that's not quite right

Finding the right fit is as important as having the right budget when it comes to home ownership. The survey found that about half of millennials had regrets about the home itself.

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Nearly a quarter, 24 percent , of millennials wish they had done more extensive remodeling after they bought their homes , double the rate of all of those surveyed. A different report from Golden-based HomeAdvisor found millennials were more likely to buy

Jeremy Wacksman, the chief marketing officer of Zillow Group, told Business Insider's Madeline Stone earlier this year, "We see nearly half of first-time homebuyers consider renting as well." Other factors could help explain why millennials are putting off buying their first homes .

One in five said they were frustrated by damages they found after moving in, while others said they discovered the house didn't end up working well for their family.

To avoid unexpected expenses, experts recommend getting a home inspection before finalizing the sale. "Especially if you're a first-time buyer or new to home ownership, you may not even know what to look for, so you definitely want to have the expert on your side," Hale says.

It can also help to nail down what you really need in a home. Make a list of your must-haves before you start looking and know what you're willing to compromise on, Hale says. It's currently a very competitive market, so chances are, you're going to have to make compromises.

In fact, about two-thirds of home buyers reported compromising on some sort of home characteristic, according to a survey from the National Association of Realtors.

"The more targeted your search is," Hale says, "the more chance you won't waste your time or get distracted by homes that ultimately aren't a good fit for you." Follow this advice, and you can avoid purchasing a home that you regret.


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